Consumer VIEWS

Status Report on the Perennial Rip-Offs

No longer is the lamb being led to slaughter. No longer is the corporate octopus reaching out with its tentacles to crush the unwary buyer.

Today's "lamb," the consumer, and the "corporate octopus," the supplier of consumer goods and services, are both far different from the way they were in the tumultuous '60s, when consumer activists first picked up their cudgels and attacked the theretofore unassailable corporations safely entrenched behind their battlements.

Frustrations on both sides of the fence still exist, Richard A. Elbrecht, supervising attorney for the California Department of Consumer Affairs, conceded in a recent interview in observance of National Consumers Week, which is this week.

Holding degrees in both economics (Yale) and law (Michigan), Elbrecht has been active on both sides of the consumer fence--in private practice and also on the staff of the Legal Aid Society in San Jose and as deputy director for the National Consumer Law Center in Boston. There he authored that organization's truth-in-lending manual for the center's attorneys. He joined the California Department of Consumer Affairs in 1976.

Less Commonplace

The flagrant rip-off is far less commonplace, and the willingness of corporations to admit their mistakes and rectify them is far more prevalent than it was 20 years ago--back in the days marked by stormy Congressional hearings on automotive safety and by housewives taking to the streets to protest soaring grocery prices.

"The idea of looking after the interests of the consumer has become widely accepted by organizations and corporations," Elbrecht said, "and they're far more willing to sit down and talk with consumers--to negotiate. Many large corporations today have established consumer-affairs offices within the company--advocates on the payroll who meet with top management, criticize company practices and who have real clout in rectifying things."

And, at the state level in California, he added, legislation continues to be enacted in those touchy areas where misunderstandings continue to be a source of friction. These are primarily in landlord-tenant relations, the automotive "lemon law" and in the control of health spas.

"Between landlords and tenants," Elbrecht continued, "the security deposit continues to be a problem; either the landlord flatly refuses to refund it, or he makes a claim against the deposit that the tenant feels is unfair. Landlords continue to try to assess normal wear and tear against the security deposit--and cumulative wear and tear as well. You can't charge this year's tenant for the replacement of drapes, for instance, that have been hanging there for 10 years through maybe four different sets of tenants."

Currently in the legislative hopper in Sacramento, he said, is legislation that would impose a penalty on the landlord--an interest rate of 2% a month--if he is required to return a security deposit and fails to do so.

'Lemon Law' Updating

Also in the works, Elbrecht said, is legislation that would improve and update the '83 "lemon law" covering new cars that are simply irreparable.

"As it was written," he added, "there were a number of deficiencies in it--it was our first cut at the problem, and like most new legislation it had some bugs."

Another issue is the high mortality in California of health spas that collect tens of thousands of dollars in prepaid memberships and then go belly up--in many cases before they've even opened their doors. Though is is a minor irritant to most consumers, it is a matter of grave concern to those who fall into the trap.

"There's probably no law on the books that would fully protect those prepayments," Elbrecht admitted, "but there's no logical reason in the world why health spas shouldn't charge on a month-to-month basis--you sure don't prepay your barber for half a year of haircuts. We've got legislation in the works now," he said, "that would require those prepaid monies to be put into a trust account, and, if the spa hasn't opened, the money will sit there until it does."

The theme of this year's National Consumers Week, Elbrecht said, is a deceptively simple truth: "Consumers Should Know."

Market Forces in Control

"By and large, we have a market economy," he added, "and while we've got a lot of laws and regulations designed to protect the consumer, market forces still largely dictate what is produced and who gets it. And the market can function efficiently only if consumers play an intelligent role in wisely allocating their disposable income. In the case of the health spas, for instance, the consumers should know that if they're going to be paying a lot of money in advance, they're also running a substantial risk of losing it.

"Consumers should know too that they experienced an actual decline of 9% in their disposable income between 1976 and 1982, and they haven't caught up yet," he added, despite the lower inflation prevailing since '82, the last year for which full figures are available.